Financial Planning With An Unsteady Income

Added June 30, 2005 by Ilyce R. Glink

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Summary: It's hard enough to sit down and create a financial plan when you have full-time job generating a regular income. Add an unsteady income and financial planning becomes an even bigger chore. Sometimes it takes a little unconventional investing and sometimes using an investment firm to help with that financial planning to make your retirement secure.

The Western Open started today. While most golfers would like to take home the first-place prize of $900,000, at least one isn't worried about using that money to pay the bills.

In the last two years, Joe Ogilvie has earned close to $3 million.

That's a far cry from the $50,000 he earned in 2002.

"There's definitely been some highs and lows in my PGA career. The highs are much better than the lows. Lucky I had a lot of savings. Lucky I had a lot of investments," Ogilvie says.

Earning a $1 million bucks allows Ogilvie to pay the $125,000 a year it costs him to play on the pro circuit pretty easily. But when he first started out, he had to raise money by selling shares in his future earnings.

"We raised securities through little investors in my home town. We put out $2,000 shares each and I think 23 people bought shares," Joe says.

Their investment in Joe earned about an 83 percent return. Joe bought out the investors and then the other money started rolling in.

"Once you get to the PGA tour, the outside money starts to come in. From the equipment companies, apparel companies, and then hopefully the corporate sponsors," Joe says.

Fortunately, investing is almost as interesting to Joe as playing golf. Like many small business entrepreneurs with fluctuating income, Joe realized that planning would be key to staying on tour over the long run.

"Every year we have a family meeting, kind of like an annual shareholders meeting type of thing where we go over our full budget for the year, what our expenses are looking like, what our investments are looking like and where we are in our lives financially," Joe says.

Although Joe has been an active investor with his money, and his wife has worked for financial firms, they finally turned to an investment firm to help them work out a financial plan that would keep enough in cash to cover a bad year, but would also increase their net worth.

"Our role is to build that investment cushion, so that if something does happen in the next couple of years, they have investments," says Brooks Carey, U.S. Trust. When you're making all that money, it's easy to give into temptation.

"It's hard for people to have this money and not buy their second house, buy their 3rd house, buy the fractional share of the jet," Carey says.

"The bottom line is when you're in a cyclical business, you can't live as high on the hog," Joe says.

Doing the right amount of financial planning gives you plenty of options in the future. "I don't know if I want to do this until I'm 50 or 60 or whatever. I do know I want to play golf for a long time, because I love the sport," Joe says.

Resources

Brooks Carey

US Trust 800-298-1910

July 11, 2005.

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